Assume That a Person Has a Quasi-Linear Utility Function of the Form

question 7

Multiple Choice

assume that a person has a quasi-linear utility function of the form
-If this person starts from a utility maximizing position,an increase in income will cause:​

• A)​more of both goods to be bought.
• B)​more of only good y to be bought.
• C)​more of only good x to be bought.
• D)​more x and less y to be bought.

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Definitions:

Tax

A compulsory financial charge imposed by a governmental organization in order to fund various public expenditures.

Per Capita Consumption

The average consumption of goods and services per person within a particular population.

Cigarette Tax

A tax imposed by governments on the sale of cigarettes to raise revenue and discourage smoking by increasing the price.

Cigarette Prices

The retail cost of cigarettes, which can be influenced by factors such as taxes, production costs, and demand.